A non-partisan blog dedicated to a discussion of politics from a social scientific perspective.

Thursday, February 6, 2014

Universal Healthcare: Is It A Disincentive To Work?

The political press is ablaze today following the latest report from the Congressional Budget Office (CBO) on the labor market. Buried somewhere in the report is an estimate that the Affordable Care Act (ACA) may result approximately two to two and a half million Americans choosing to work less or not at all within a decade due to the availability of subsidized health insurance. While this isn't the focus of the report, it is what the political elite chose to fixate upon. Republicans seized on the estimate as proof positive that the ACA is a bad thing and creates a disincentive to work and incentivizes laziness and dependency upon the government. The Republican aligned Washington Times spun the story as one that will 'Push 2 Million Workers Out of the Labor Market.' The left-leaning Washington Post spun the story as one of choice by claiming the ACA would 'prompt over 2 million to quit jobs or cut hours', ostensibly because they could keep their health insurance even if they gave up their job. Democrats immediately began arguing that this is a positive thing as some of those who gave up their jobs might take a risk and start a business that could end up employing others. Others might take their new found independence from working a low wage job to spend more time with their kids or spouses. Either way, the spin from the political elite highlights one of the idiosyncratic features of the American economic ethos...tying the provision of health insurance to an employer.

Adopting a normative framework, one might ask why health insurance in America is so intricately tied to one's employment status? Do people without jobs have no need of health insurance? What about those in low wage industries whose employers do not offer coverage? If we are going to link employment and health insurance it seems logical that all employers should be required to offer it to their workforce. Yet, prior to the ACA that was not a requirement. Even after the ACA small businesses with fewer than 50 employees are exempt from providing health insurance coverage to employees and those with more than 50 employees only have to pay a $2000 fine (per employee) if they fail to offer insurance. Considering that providing coverage to a worker costs far more than $2000 per worker, the real disincentive in the law is benefit for employers who can save hundreds of thousands of dollars by dropping health care coverage for their workforce. Of course, many of those workers will then qualify for federal subsidies to purchase insurance on the market exchanges, which means that once again the government is subsidizing large corporate employers as it has done for decades. For example, McDonald's and Wal-Mart employees are among the largest recipients of federal benefits in the country. Why are taxpayers subsidizing below poverty level wages at these highly profitable companies? So we can have a $.99 cheeseburger or pay $.06 less for a loaf of bread? Please!

A second aspect that arises from all the chatter about the potential effect of the ACA on employment is just how much politicians, Republicans in particular, love to talk about work. It is as though work has been raised to the status of a demi-god. Don't get me wrong, I'm all for working and I do my fair share of it between a full time job and two side jobs now and then. And I am in the rather unique position of loving what I do, something many Americans cannot say. Nevertheless, the emphasis on work also seems to be something idiosyncratic to America. Many cultures, both past and present, place more emphasis on the family or community or the life of the mind than we Americans do. For example, Australia requires all employers to provide 20 days of paid vacation per year plus 10 paid holidays. French workers get a minimum of 5 weeks paid holiday leave plus up to 22 days of reduced time for workers who work between 35 and 39 hours a week. Even our Canadian neighbors to the north mandate a minimum of 10 paid vacation days per year. The good old USA? 0 days of mandatory paid vacation. It makes one wonder if there is a correlation between the disintegration of the American family and the emphasis placed upon working at all costs, even in dead end low wage jobs.

In the end, we all have the same fate to look forward to. I think it was Barbara Bush who said something to the effect of this: At the end of your life when all is said and done it is highly doubtful you will look back and wish that you had gone to the office just one more time or pulled that double shift at Burger King. No, the thing you will wish you had done more of is spend time with your kids, with your spouse, with your friends and loved ones. So...I say, if the ACA makes that possible for some people, it's a step in the right direction. I'm okay with that, how about you?

About Me

I am an Assistant Professor of Political Science. My research interests include the presidency, the Congress, and institutional relationships. I'm married (Kate) with one daughter. We have two rescue hounds named Remy and Tessie, who love to get into trouble. My wife and I are the owners of the web based travel agency 'The Cruise Doctor' We love traveling to Walt Disney World and just about anywhere by cruise ship.